Most recent update: [Jan 2, 2025]
What is IOTX?
The IOTX token is the native cryptocurrency of the IoTeX blockchain, which is designed to create a decentralized network for Internet of Things (IoT) devices. Initially launched as an ERC-20 token on the Ethereum blockchain, IOTX transitioned to its own blockchain in 2019. The IoTeX platform connects IoT devices with blockchain technology, enabling secure data sharing and privacy while giving users control over their information. IOTX is central to this network, used for governance, transaction fees, staking, and powering decentralized applications. By staking and voting, token holders help secure the network and maintain its integrity, making IOTX essential for the platform's functionality and growth.
Web3 refers to a decentralized internet where users control their data, powered by blockchain networks. This innovation extends to the IoT, where physical devices like security cameras or appliances connect to the internet to share and analyze data. IoTeX stands out in this space by focusing on Decentralized Physical Infrastructure Networks (DePIN), which ensures secure, verifiable interactions between physical devices and digital applications without relying on central authorities. IoTeX simplifies the creation of custom IoT solutions with its modular infrastructure, making it easy for developers to build scalable projects. Its ioID technology provides self-sovereign identities for devices that enable verifiable on-chain interactions. These innovations position IoTeX as a leader in combining blockchain and IoT, driving the future of decentralized ecosystems.
Who is Behind IOTX?
Since its founding in 2017, IoTeX has been led by a team of skilled professionals, including Raullen Chai, Qevan Guo, Jing Sun, and Xinxin Fan. Their goal was to create a secure, scalable, and decentralized infrastructure to connect IoT devices to blockchain networks. Raullen Chai, the CEO, has a background in cryptographic research from Google and Uber, while CTO Qevan Guo brings machine learning expertise from Facebook. Jing Sun, the COO, has extensive experience in blockchain and IoT investments. Their leadership has been crucial to IoTeX’s growth in the decentralized technology space.
Under their leadership, IoTeX has achieved significant milestones. The project was initially launched as an open-source platform to create a decentralized environment for secure and trusted communication between humans and machines. Since launching its mainnet in April 2019, the platform has introduced innovative products like Ucam, the first blockchain-powered home security camera, and Pebble Tracker, a device for secure IoT data collection. These products have strengthened IoTeX's position in the DePIN space, which focuses on secure, scalable interactions between IoT devices and blockchain applications.
Supported by various prominent investment funds, IoTeX continues to grow. The platform has garnered attention for combining Ethereum-like architectures with advanced technology, providing superior user experience. Notable partnerships include Network3, an AI-powered DePIN project, and Nubila, which focuses on environmental data. Collaborations with Inferix and PowerPod further extend IoTeX's influence across sectors such as AI, renewable energy, and environmental monitoring. This modular framework allows IoTeX to create customized IoT solutions, reinforcing its role as a leader in integrating IoT and blockchain across different industries.
How does it work?
IoTeX addresses the key challenges previously faced by industries adopting the IoT, such as centralized control, limited scalability, privacy issues, and inefficiencies in managing data. Traditionally, IoT systems were centralized, creating vulnerabilities to cyber-attacks, data misuse, and privacy violations. This centralization also hindered scalability and failed to offer fair incentives, leading to underutilized infrastructure and fragmented data. IoTeX solves these problems by providing a decentralized framework, which offers more secure, efficient, and scalable IoT ecosystems.
IoTeX works by leveraging blockchain technology to decentralize the management of IoT devices and data. This decentralization reduces the risk of breaches, enhances privacy, and builds trust across the network. IoTeX utilizes cryptographic techniques like zero-knowledge proofs (ZKPs) to facilitate private and secure data sharing. Moreover, IoTeX introduces a tokenized economy through its IOTX token, rewarding participants who contribute hardware, data, or resources to the network. This incentive drives the deployment and maintenance of IoT infrastructure, while also fostering a peer-to-peer exchange of data. By rewarding users, IoTeX promotes the scaling of IoT networks, making them more sustainable and efficient.
IoTeX's blockchain platform is designed to handle high throughput and low latency, making it scalable enough to support large IoT networks without the bottlenecks seen in traditional systems. It uses a consensus mechanism called Roll-DPoS (Delegated Proof of Stake), optimized for IoT, which processes transactions quickly and efficiently. This decentralized approach facilitates seamless interaction between devices from various ecosystems, paving the way for the next generation of decentralized IoT networks.
The IOTX Token and Tokenomics
The total supply of IOTX is capped at 10 billion tokens, with 9.44 billion tokens currently in circulation. As of January 2nd, 2024, the market capitalization of IOTX stands at US $379,540,212.
The IOTX token supply is allocated to various purposes, with 25% going to the IoTeX Foundation to drive sustainable growth through research, development, partnerships, and marketing. 18% is allocated to bootstrap the ecosystem, targeting IoT manufacturers and builders to maximize device registrations, while 12% is reserved for Roll-DPoS mining rewards. 6% is set aside for community engagement through campaigns and referrals, and 24% of tokens were distributed in a private sale to accredited investors in January 2018. Finally, 15% of tokens are allocated to the team, subject to a four-year vesting period with a one-year cliff.
Security
The IoTeX platform is secured through a combination of advanced cryptographic techniques, blockchain architecture, and consensus mechanisms. At its core, IoTeX employs Roll-DPoS (Randomized Delegated Proof of Stake), an enhanced version of the Delegated Proof of Stake (DPoS) consensus mechanism. In this system, a set number of trusted block producers, voted for by stakeholders, are responsible for validating transactions and creating new blocks. Roll-DPoS combines DPoS with Verifiable Random Functions (VRF) and Practical Byzantine Fault Tolerance (PBFT), which helps increase decentralization and scalability. It also improves security by randomizing block production and providing fault tolerance.
In addition to the consensus mechanism, IOTX focuses on privacy through cryptographic protocols. The platform uses ring signatures and relayable payment codes to hide transaction details such as the recipient's address, keeping sensitive information private. These privacy measures are built on a lightweight address system that minimizes the need for devices to scan the entire network for incoming transactions, thus improving efficiency and reducing exposure to potential attacks.
The IOTX itself also plays a key role in platform security. The token is used for staking, transaction fees, governance, and securing decentralized identities (DIDs) for users and devices. Staking IOTX helps validate the network and involves users in governance decisions, like electing block producers, and incentivizes token holders to act in the network's best interest. This staking mechanism also protects the network from malicious actors, as stakers risk losing their tokens if they attempt to disrupt the system. Additionally, IoTeX supports cross-blockchain communication, allowing secure data sharing between different blockchains. With instant block finality, once a block is added, it cannot be altered, preventing rollback attacks and maintaining data integrity.
Drawbacks and risks
Despite these security features, the IOTX token comes with several risks and drawbacks that should be considered by token holders. One of the primary concerns is the potential for centralization. While IoTeX uses the Roll-DPoS consensus mechanism to enhance scalability and decentralization, it still relies on a fixed number of block producers. This could lead to some centralization, where a small group of entities control the network. Such centralization undermines the network's decentralization and resilience.
Another significant risk is the regulatory uncertainty that surrounds blockchain and cryptocurrency projects. As governments and regulators continue to refine their stance on digital assets, IOTX could face increased scrutiny or even restrictions, depending on the regulatory frameworks that emerge. These changes could affect the token's use, trading, or adoption in various jurisdictions.
In addition, IOTX is subject to the inherent volatility seen in the broader cryptocurrency market. The value of the token can fluctuate significantly based on market trends, investor sentiment, and overall market conditions. This volatility can make the token a risky asset with no intrinsic value and introduce instability within the ecosystem.
Adoption poses a significant risk to IoTeX’s success, as the platform's vision of a decentralized IoT ecosystem relies on widespread adoption by device manufacturers, developers, and users. Without attracting a critical mass of participants, IoTeX may struggle to scale and achieve the necessary impact in the IoT sector. Additionally, the technical complexity of the IoTeX platform, while enhancing security and privacy, can create barriers to entry for developers and users who lack expertise in these areas. This complexity could slow adoption, making it harder for the platform to achieve its broad IoT integration goals and potentially reducing trading activities.
Due Diligence
Before listing IOTX on the VirgoCX Platform, VirgoCX performed due diligence on IOTX and determined that IOTX is unlikely to be a security or derivative under Canadian securities legislation. VirgoCX’s analysis includes reviewing publicly available information on the following:
- The creation, governance, and location of IOTX and/or its primary development team;
- The supply, demand, maturity and liquidity of IOTX; and
- Legal and regulatory risks associated with IOTX.
Statutory Rights under Securities Legislation
VirgoCX is offering Crypto Contracts on crypto assets in reliance on a prospectus exemption contained in the exemptive relief decision Re VirgoCX Inc. dated May 30th 2024 (the Decision). Please be aware that the statutory rights in section 130.1 of the Securities Act (Ontario) and, if applicable, similar statutory rights under the securities legislation of each other province and territory in Canada do not apply in respect of the Crypto Fact Sheet to the extent a Crypto Contract is distributed under the prospectus relief in the Decision.
Further Reading
To learn more about the technology behind IOTX, check out these in-depth resources here:
- The official site of IOTX
- Coinmarketcap’s overview of IOTX
- Coingecko’s tokenomics overview of IOTX
- Coinbase’s overview of IOTX, along with the relevant news and blogs related to IOTX.
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